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OregonSaves Launches Pilot Program

The state of Oregon has officially launched its pilot program for OregonSaves, the first-of-its-kind state sponsored retirement savings plan. A small group of employers across the state, together representing 151 employees, officially kicked off the pilot program on July 1, 2017.


According to Oregon State Treasury, as many as 1,000,000 people -- or 1 out of every 4 people in the state -- could eventually benefit from this retirement savings plan. State officials have estimated that 64,000 (mostly small) businesses will have employees eligible to participate in the plan.

We are committed to making sure the plan works well for workers and employers, and will make a dent in the massive retirement savings gap that threatens to overwhelm public services.
— Ted Wheeler, Oregon State Treasurer

While sponsored by the state, OregonSaves is not a pension plan and is not connected to the Oregon Public Employee Retirement System (PERS). 

How It Works

Employers in Oregon will be responsible for automatically enrolling their eligible employees into the OregonSaves retirement savings plan. Each employee will have 30 days to opt-out of the program after they've received their enrollment material. Self-employed workers will need to enroll in the program themselves.

By default, employers must deduct 5% of an eligible employee's after-tax wage, and contribute that amount into a Roth IRA in their name. Employees can change their contribution amounts in 1% increments, with a minimum of 1% and a maximum of 10%. Each employee is limited to one contribution change per month.

Employees are also subject to existing Roth IRA contribution limits. For 2017, those limits are:

Table Style
Tax Filing Status Modified Adjusted Gross Income Contribution Limit
Single, head of household, or married filing separately Uner $118,000 Up to $5,500
$118,000 - $132,999 A reduced amount*
$133,000 and over Zero
Married but filing separately, and you live with your spouse at any time in 2017 Up to $10,000 A reduced amount*
$10,000 and over Zero
Married filing jointly Under $186,000 Up to $5,500
$186,000 - $195,999 A reduced amount*
Up to $196,000 Zero

*To calculate your reduced contribution limit, refer to IRS Publication 590-A, Contribution to IRAs.

In 2017, eligible employees age 50 or older are allowed to make an additional $1,000 in "catch-up" contributions to a Roth IRA.

By policy, the first $1,000 contributed by an employee is invested in a capital preservation investment selected by the Oregon Retirement Savings Board. After the first $1,000, employees can choose how to invest their contributions from a menu of low-cost index funds managed by State Street Global Advisors (SSGA), which includes a broad range of target date funds.

Regardless of investment choice, each participant in the OregonSaves Retirement Savings Plan will pay an annual expense ratio of 1.05%, or $10.05 per $1,000 invested, annually.

There are no charges to an employee for withdrawals, changing contribution amounts, or moving money between investment funds.   

It's Mandatory

Any business with employees in Oregon that don't already offer a qualified retirement plan (i.e., a 401(k) plan) will be required to facilitate the State's program for its employees. 

Assuming all goes well with OregonSaves' pilot program, the first registration, or "comply-by" date, will be November 15, 2017. By this date, businesses with 100 employees or more will have to register with OregonSaves or file their Certificate of Exemption. The program will roll out in phases with the last phase ending May 15, 2020. 

Table Style
Number of Employees Registration Deadline
100 & over November 15, 2017
50 - 99 May 15, 2018
20 - 49 December 15, 2018
10 - 19 May 15, 2019
5 - 9 November 15, 2019
Under 5 May 15, 2020

Regardless of the number of employees, a business will be exempt from the OregonSaves Retirement Savings Plan if they are able to certify that the business offers a qualified plan, such as a 401(k) or 403(b), to all its employees within 90 days of hire. Once a Certificate of Exemption is approved, it is valid for 3 years, as long as the business continues to offer its qualified plan.

Employee Eligibility

For those businesses that don't qualify for exemption, they must facilitate OregonSaves for all their employees in Oregon that are age 18 or older. Self-employed workers and part-time workers will also be eligible to participate in the plan.

Additional Resources

To learn about the latest developments of OregonSaves, you can sign up to receive email updates, meeting agendas, and notices here. The Oregon Retirement Savings Board has also posted all the material from previous board meetings online. If you'd like to do a deeper dive, take a look at some of the following resources.

  • Barran Liebman Breakfast Seminar on July 11th (link)
  • OregonSaves FAQ (link)
  • OregonSaves Facebook (link) and Twitter (link)


If you're looking for advice on how to navigate the topic of retirement savings for your employees, we'd love to have that conversation with you. Give Eric a call at 971-930-4447, or reach out to our sales team at 

403(b) or 401(k): A Choice For Tax-Exempt Organizations

Employers wanting to offer a retirement plan for their employees have many choices. For tax-exempt, non-profit organizations one such choice is whether to offer a 401(k), a 403(b), or both. This post touches on the differences and pros and cons, and leaves employers with some guidance to help make a decision.

Who can offer a 403(b) plan?

The IRS says a 403(b) plan, or tax-sheltered annuity (TSA), can be offered by public schools, churches, and certain tax-exempt organizations.  Here's a more complete list provided by the IRS:

  • An entity created under the section 501(c)(3) of the Internal Revenue Code
  • Public school systems
  • Cooperative hospital service organizations
  • Uniformed Services University of the Health Sciences (USUHS)
  • Public school systems organized by Native American tribal governments
  • Certain ministers
  • Any 401(c)(3) institution which might include a not-for profit university, religious organization or social service agency

Eligible organizations are typically structured as corporations, community chests, funds or foundations. Generally speaking, sole proprietorships, partnerships and for-profit corporations won't qualify for a 403(b).

*Tip: There are over 23,000 registered 501(c)(3) organizations in the state of Oregon. Use this tool to lookup any registered 501(c)(3) organization.

Who can offer a 401(k) plan?

Unlike 403(b) plans, the IRS allows both for-profit and non-profit entities to offer a 401(k) plan. In fact, with the exception of governmental entities, virtually any organization can establish a 401(k) plan. Non-profits are even allowed to offer both a 401(k) plan and a 403(b) plan, although this arrangement is not common.

Similarities between 403(b) and 401(k)

  • An employee's maximum annual contribution in both plans is $18,000*
  • Employees over the age of 50 are allowed an additional catch-up contribution of $6,000*
  • Total contributions to an employees retirement account are capped at $54,000 in 2017, including employer contributions
  • Both plans can be terminated according to pre-determined plan governing rules
  • Both plans allow for Roth contributions

Contrasts between 403(b) and 401(k)


Table Style
CONTRAST 401(k) 403(b)
Investment Options Any investment option is allowed according to the Employee Retirement Income Security Act of 1974 (ERISA). Includes: mutual funds, annuity contracts, individual securities, and managed portfolios. Annuity contracts or custodial accounts invested in mutual funds. Churches may have additional options.
Eligible Employees All or a sub-set of the employer's employees. All employees must be eligible for elective deferrals (including Roth contributions) if any are eligible, with certain limited exclusions permitted.
15-Year Service Catch-up Not permitted Permitted but must be applied first if aged 50 catch-up also applies
Actual deferral percentage (ADP) test of elective deferrals (including Roth contributions) Generally required Not applicable
Hardship Withdrawals Allowed, after a specified number of years, certain age, disability or other predetermined event. Allowed from annuity accounts, after a specified number of years, certain age, disability or other predetermined event. Hardship withdrawals from custodial accounts allowed only at age 59 1/2 or upon disability.
Applicability of ERISA Generally subject to ERISA Plan with only elective deferrals (including Roth contributions) not subject to ERISA under certain conditions. Matching contributions, even if made to a plan other than the 403(b), or other employer contributions to the 403(b) plan, generally will cause the 403(b) plan to be subject to ERISA.

403(b) plans have been getting some unfavorable press recently due to their reputation for excessive cost to participants and more lenient regulations. A recent article in The New York Times brought these issues to the forefront in the public domain.

403(b) accounts that many workers contribute to are not subject to the more stringent federal rules and consumer protections that apply to 401(k) plans.
— The New York Times

But not all 403(b) plans are bad. Organizations that perform their due diligence, work with long tenured retirement plan experts, and put the best interests of their employees first, will find that both 403(b) and 401(k) plans can be successful vehicles for accumulating retirement savings.

Year End Reporting for Plan Sponsors: What You Need to Know

The year is coming to a close, and with that comes important responsibilities regarding your company’s 401(k) plan. To get you prepared for annual reporting, here’s a review of the most common questions from our plan sponsors.

What are plan sponsors required to report?
Year end reporting begins with plan sponsors annually collecting employee census and employer data including financial information about the assets held in the plan and transactions that have occurred over the year, the number of participants, and the service providers involved with the plan.

The data collected allows the plans sponsor to fulfill much needed tasks such as:

·      Perform compliance testing
·     Make corrective distributions
·      Complete the annual Form 5500 filing with the DOL and IRS

Accuracy of your census information is critical to maintaining a compliant plan. We recommend sponsors use year end payroll reports to document and detail the following for each employee:

·      Name
·      Compensation level
·      Relevant dates
     (birth date / hire date / termination date / rehire date / retirement date)
·      Number of hours worked

When are plan sponsors required to report this information?
Plan sponsors are required to file Form 5500 by the seventh month following plan year end. Extensions can be requested to extend the due date two and a half months. For example, a plan year ending December 31, 2016, would have an initial filing deadline of July 31, 2017 or an extended deadline of October 15, 2017.

Why do plan sponsors need to file year end reports?
The Employee Retirement Income Security Act (ERISA) requires that plan sponsors of 401(k) plans complete year end reporting to verify their plans meet qualification requirements and are compliant in order to maintain their tax-exempt status.

How do plan sponsors complete year end reporting?
Plan sponsors submit three reports covering specific plan data to assure that contributions are allocated fairly to each eligible participant.

Employee Census

The employee census includes information such as birth date, hire date, participation date, termination date and current employment status.

A plan sponsor uses this information to determine plan eligibility, entry dates and participant status.

Compensation, Hours, and Contributions

The compensation, hours, and contributions is used in compliance testing and for identifying highly compensated employees as well as key employees.

Year End Summary

The year end summary details owner and company related information to identify highly compensated employees, key employees, and controlled groups.

Along with federal reporting, plan sponsors are required to provide participants with a Summary Annual Report that details the plan’s annual activity.

Help is here.
Given the complexity of testing and detail of reporting that is required of plan sponsors, the IRS offers a dedicated resource on the workings of 401(k) plans and various tools to help small businesses.

Partnering with Inde is another solution, as we provide plan sponsors with complete year end reporting including signature ready tax forms, while providing guidance on current regulations and important compliance issues.

Questions about year end reporting? Let’s talk! Call us at 503-303-8590 or contact us online today.

Reduced Pricing for Voluntary Correction Program

For many small businesses, regulatory compliance is a significant concern when it comes to managing their retirement plan. Few things bring greater relief to a Plan Sponsor than knowing their Plan is compliant. And likewise, few things are scarier to a Plan Sponsor than finding out their Plan is not. 

Unfortunately, this happens frequently with small business owners. These individuals often lack the internal resources, time, and expertise to prudently manage administrative requirements of their retirement plan that ensure its compliance.

Third party administrators can be extremely valuable partners to small business owners for this reason. Working together, we can identify the appropriate steps for fixing any document, compliance, or operational errors. 

And the good news is in February 2016, the IRS announced a fee reduction to their voluntary correction program (VCP) to encourage small business owners that sponsor 401(k) or profit sharing retirement plans to fix their plan document problems. The new discounted user fees for VCP submissions are referenced below.

If you need assistance bringing your Plan into compliance, we can help. Contact us today, and we can work quickly to bring you peace of mind that comes with knowing your Plan is fully compliant. 

How to Think About Administrative Cost

From Bob McKendry's blog post titled, "Should Cost be the Primary Factor in Selecting a Third Party Administrator?":

"The bottom-line for selecting a TPA is not always cost. Many factors, including the complexity of your business environment, the changing nature of your workforce and plan history may dictate a higher degree of expertise and skill for your TPA."

McKendry goes on to write:

"A typical misconception is all TPAs offer the same services and expertise, so cost should be the main actor in selecting a TPA. But, just like doctors or lawyers, not all TPAs have the same skill set and expertise. Nor do all TPAs offer the same services. The services offered by TPAs are often limited by the fees charged by the TPA and the skill set and expertise of the firm."